Elon Musk might have another $50 billion company on his hands

Elon Musk, CEO of SpaceX and Tesla, started the company in 2002 with the eventual mission of colonizing Mars. It’s a lofty goal, and one that’s hard to totally comprehend. But, as SpaceX continues to defy expectations, land reusable rockets and complete mission after improbable mission, the value of the company continues to rise.

Right now, SpaceX is a private company. Unlike Musk’s Tesla, which went public in 2010 and is now worth about $59.3 billion, SpaceX’s value is hard to determine. It’s also said that it doesn’t plan on going public anytime soon, which means it will probably be some time before we get a detailed look at its books. In light of that, one analyst took a stab at uncovering what an IPO for the company could look like.

“We note that [SpaceX] has recently denied that it was preparing for an IPO, and we have no knowledge of any specific transactions,” Adam Jonas, an analyst at Morgan Stanley, wrote in a recent note. “However, with upcoming projects that require significant amounts of capital, it seems reasonable to consider whether the company could look to access capital in the public markets.”

Jonas laid out his case for what SpaceX would look like if it were to go public in the near term. His base case values the company at about $46 billion, which is on par with Tesla. His range is pretty wide, though, and spans between $5 billion and $120 billion.

Most of the value of SpaceX, in Jonas’ view, would come from a satellite-based broadband business. Jonas sees SpaceX launching lots of satellites into space that would blanket the globe in wireless, high-speed internet. He said that satellite broadband could represent as much as 50% of the total value of space. As the cost of getting a satellite into orbit falls, and the demand for broadband increases, it makes sense to move our internet operations skyward.

SpaceX has already laid out its plan for satellite-based broadband in a Senate hearing earlier this year. The company is in the testing phase now but hopes to begin launching its first satellites in 2019 and its global network in 2024.

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Jonas said that the net present value of this satellite internet business is about $43 billion.

On top of its satellite internet plan, Jonas sees about a billion dollars of value in SpaceX’s current satellite launch program. Companies without their own ability to launch rockets into space currently pay SpaceX to send their satellites. Right now, the price that SpaceX is charging for one of these launches is relatively low compared to the cost of the operation.

“While SpaceX has managed to reduce the cost to launch a satellite, the business generates limited operating income,” Jonas said. “We believe the reason for this is that SpaceX is willing to pass through the cost savings to its customers in order to gather data on the launch, to perfect the process, and, eventually, go to Mars.”

Combining its launch and internet business, along with some cash laying around at the company, leads Jonas to his $46.018 billion valuation. If the company’s satellite-internet business doesn’t take off, the company could be valued at a smaller $5 billion. Jonas said that if both businesses do better than expected, the company could be worth as much as $120.6 billion.

Mars is an eventual goal for SpaceX. The company recently laid out its plans for its first martian-aimed rocket launch in 2022, though plans for how it would fund the mission are fuzzy. If SpaceX has to spend like crazy to make its Mars plans succeed, it could put a dent in the total valuation.

It’s worth reiterating that this is all speculative. Because SpaceX is privately held, it’s hard to determine exactly how much the company is worth. SpaceX has also said that it doesn’t plan on going public soon. But despite that, Jonas’ predictions are interesting.